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Sherlock finds Medicare plan sales and marketing squeeze

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The typical health insurer with a big Medicare Advantage operation may have spent about $12 per member per month on sales and marketing in 2014, or about 7.9 percent less than it spent in 2013.

Analysts at Sherlock Company, a health insurance company data firm, have presented that finding in a look at the performance of 10 Medicare Advantage plan issuers that participate in its benchmarking surveys. The participating companies covered about 680,000 of the 16 million people who had Medicare Advantage plan coverage in 2014.

The median Medicare Advantage plan spent a total of about $42 per member per month on all administrative costs in 2014, down 13 percent from the previous year.

Even though the issuers spent less on administrative costs, the share of their administrative budgets that went to sales and marketing actually increased, to 28 percent, from 26 percent.

When the analysts looked only at Medicare Advantage issuers that participated in the company’s survey program both in 2013 and in 2014, they found that the median level of sales and marketing spending at those companies fell just 2.4 percent.

The adjusted sales and marketing spending drop was down sharply from a drop of 5.9 percent in 2013.

See also: GAO: ‘Traditional Medicare’ is private, too


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